The federal government is on the verge of crashing all forms of taxes paid by Micro, Small, and Medium Enterprises (MSMEs) in the country to drive their expansion and consolidation in an economy hobbled by recession and credit squeeze.
Minister of Finance, Mrs. Kemi Adeosun, made the disclose in Lagos saying the qualification for the lower income tax rate applicable to small businesses should be a review in line with current economic realities.
“The Income tax rate for small businesses should be further reduced as an incentive to encourage compliance and promote Micro, Small and Medium Enterprises, (MSMEs)
Adeosun who was represented by Hajia Larai Shuaibu, Director Technical Service Department, said “federal and state Tax authorities should respond promptly to the changing business environment as it affects tax administration and develops a useful framework to meet the taxpayer demands in this respect”.
Drawing her inspirations from a paper presented by Seye Arowolo, of Akintola Williams Deloitte, who said “MSMEs in Nigeria are still battling with issues relating to taxes which affected their performance,” Adeosun assured further that government will not only effect a downward review of all taxes payable by operators of small businesses, but will provide support.
In an exclusive interview, Arowolo argued that “MSMEs have not performed credibly well and hence have not played the expected vital and vibrant role in the economic growth and development of Nigeria. We have 27.7 percent of registered businesses in Nigeria pay taxes out of the recorded number of 450, 000. This is probably because of a real disconnect between policy intent and the realities of MSMEs.”
“Any business battling with for survival will find it easy to evade tax, however, one of the challenges of MSMEs is the huge percentage requested by the federal government. Other problems include over-regulation, unfavorable fiscal policies along with regulatory frameworks.”
“In order to unleash the potentials of MSME for the benefit of Nigeria’s economy, it is germane for the government to revisit its approach to the challenges of the MSME sector”.
